AIRLINES
Flybe tackles capacity issues after £20m loss
FLYBE HAS POSTED A PRE-TAX LOSS of £19.9 million after ambitious plans for capacity growth, coupled with slow growth in passenger numbers, led to increased costs. The regional airline saw revenues for the year to March 31 increase by 13.4 per cent to £707.4 million, but its near £20 million loss is down from a £2.7 million profit the previous year. Flybe said it is planning to reduce the size of its fleet after experiencing slower growth in consumer demand. Six Bombardier Q400 aircraft will be cut from the fleet next year.
An aggressive expansion plan increased capacity on the airline by 12.3 per cent to 12.7 million seats, but passenger traffic only increased 7.6 per cent to just under 9 million. However, it said it was now “well placed” with better control over its capacity than previously. CEO Christine Ourmieres-Widener said this would also enable Flybe to focus on more profitable routes as well as put greater focus on customer requirements. The company said in a statement: “Despite the substantial progress in reducing the size of legacy fleet orders in 2015/16, Flybe has still seen significant capacity growth in a market where we witnessed slower growth in consumer demand. “New routes and increased frequencies were targeted to cover marginal costs in the early years of operation, but do not contribute significantly to overall profitability. “The capacity growth, therefore, had a negative effect on profitability.” It added: “We will make Flybe a sustainable business that operates the best routes and at the best times to suit the needs of our customers.” In addition to the over-capacity problems, a major IT upgrade hit profits by £4.8m last year and the company warned that an extra £6m would have to be spent cancelling costly contracts.
HRG and Concur sign NDC deals with BA
HRG AND CONCUR HAVE BOTH SIGNED DEALS to offer NDC connections from British Airways to their clients. BA offers flight search, booking and ticketing through its NDC
project and has also added the ability to cancel and refund existing bookings as well as adding a seat to a current booking. Concur has also agreed a deal with Lufthansa to offer content to customers from the German airline’s NDC feeds. The expense management firm already has deals with BA, Lufthansa and Iberia to capture bookings that are made directly with the airlines through its Triplink platform. HRG’s chief information officer Bill Brindle said the deal with BA showed the TMC was “at the forefront of new distribution”.
DISTRIBUTION
C M Y HOTELS
Marriott ups cancellation policy to 48 hours notice in Americas
MARRIOTT INTERNATIONAL HAS IMPLEMENTED A NEW CANCELLATION POLICY which will require guests to give 48 hours notice to avoid a fee. The change, from a 24-hour notice period, applies at Marriott properties and brands across the Americas, including the US, Canada, the Caribbean and Latin America, except for the group’s Design Hotels brand. Hilton and Hyatt hotels already require 48 hours notice or longer for cancelling a reservation without penalty.
POLITICS
TRUMP TRAVEL POLICIES COULD CAUSE $1.3BN LOSS
THE GLOBAL BUSINESS TRAVEL ASSOCIATION (GBTA) is predicting a loss of US$1.3 billion in travel-related spend in the US due to “political uncertainty”. The association said President Trump’s
travel ban followed by an electronics ban for passengers travelling from ten mainly Muslim countries, that may be extended to Europe, is hitting the US economy. Using first quarter ticketing data from the ARC (Airlines Reporting Corp.),
16 BBT July/August 2017
publicly available travel data and its own research and models, GBTA developed an ‘uncertainty forecast’ for 2017 showing the impact the mounting geopolitical uncertainty is having on the economy. The US$1.3 billion predicted loss includes US$250 million lost in spending from inbound business travellers from Europe and Middle East.
“The even greater concern is that the
longer-term impact on business travel will be even greater as companies begin to host meetings and events in other destinations,” said the organisation. The GBTA said the “devastating economic impact” from political issues could take years to recover from. “US
GDP will take a nearly U$300 million hit. More than 4,200 jobs could be lost along with US$175 million in wages and US$70 million in tax collections. Europe is forecast to lose over US$250 million in airfare spending, and the Middle East will lose over US$80 million in airfares.” It added: “Business travel drives lasting business growth… Continuing to enact policies that discourage business travel will cause a rippling effect across the travel industry and the overall economy. We urge the Trump administration to consider the important lasting impact of business travel and enact policies going forward that preserve both our national security and our economy for the future.”
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